IRS Says Businesses Will Not be Required to Reconcile Gross Receipts to Form 1099-Kby Victoria Majors Jones, CPA on 02/14/12
In an about face, the IRS has now changed their position and will no longer require businesses to reconcile their gross receipts with merchant card transactions reported on Form 1099-K on their 2012 or later returns.
Steven T. Miller, IRS deputy commissioner for services and enforcement, said in writing to the National Federation of Independent Business that no reconciliation will be required on 2012 or future business tax returns.
2011 business returns include a separate line to report 1099-K gross receipts, but the IRS instructions say “For 2011, enter 0." The line was to become effective in 2012 but it appears that this line may disappear altogether when the forms are finalized by the IRS for the 2012 tax year.
(This obviously does not mean that business don't have to report this taxable income. It just means that they don't have to separately report 1099-K gross receipts from other gross receipts on their business returns.)